All of the Following Are Correct Statements About the Cost-Based

question 49

Multiple Choice

All of the following are correct statements about the cost-based transfer price approach except that it

• A) can understate the actual contribution to profit by the selling division.
• B) can reduce a division manager's control over the division's performance.
• C) bases the transfer price on standard cost instead of actual cost.
• D) provides incentive for the selling division to control costs.

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Definitions:

Rayonnant Style

An architectural style of Gothic architecture, noted for its elaborate decorative elements and emphasis on the play of light, prevalent in the 13th and 14th centuries.

Louis IX

Also known as Saint Louis, he was King of France from 1226 until his death in 1270 and is remembered for his charitable acts and the justice of his rule.

Second Crusade

The Crusade that occurred between 1147 and 1149, a failed attempt by European leaders to reconquer the Crusader states in the Middle East from Islamic rule.

Scissors Arches

A pair of arches resembling scissors, comprising an inverted arch above a traditional arch; used in the nave of Wells Cathedral in the 14th century.